Auditors are refusing to sign off a council’s annual accounts after discovering ‘fairly big errors’ in the authority’s financial data.
Taxpayers now face having to shell out an unspecified extra charge on top of the £42,352 fee imposed by Grant Thornton to approve Newcastle Borough Council‘s accounts.
Auditors discovered a £2.3 million increased pension liability as well as seven significant findings and two significant risks.
One of the issues has been the retirement of the council’s longest-serving finance boss – referred to only as Dave – who was said to hold important information ‘in his head’.
Grant Thornton official Philip Jones said: “There has been a lot of chop and change at Newcastle as a key member of finance who has prepared these accounts historically has retired. So there’s been a fair amount of churn within the accounts department.
“There were some fairly big errors in these accounts and we are working through them with officers. We think the working papers need to be strengthened so they are clearer as to how the accounts work.”
He added: “Dave has been doing this for 50 years and a lot of it was in his head. He was able to give us the answers off the top of his head.”
But opposition councillors are furious that these issues were not resolved before the officer retired.
Councillor Mike Stubbs asked: “Did we not see this coming? This guy has been retiring for as long as I’ve been a councillor. I’m really stunned that it wasn’t foreseen.”
Council finance boss Jan Willis responded: “Absolutely we knew that Dave was retiring in February and there was an extensive period of handover.
“It was always going to be difficult. His detailed, intimate understanding of our accounts is irreplaceable. The working papers have been of the same standard as in previous years.”
The council’s audit and standards committee voted to sign off the draft audit at its meeting this week. It is hoped that the 2018/19 accounts will finally be completed by August 31 – a month after the statutory deadline.
Mr Jones added: “We will have to charge an additional fee. We will discuss with the director of finance what we think is an appropriate fee. This is the first time this has happened at Newcastle. We wouldn’t anticipate this happening again.”
Following the meeting, Mr Stubbs said: “This can only be under-staffing. We’ve lost one of the key accountants in this building for the last 30 years. We’ve known he’s been retiring for several years and we’ve not acted on that.”